Microsoft MSFT Stock Update: Microsoft & Samsung Battle Out for Patent Fees

Microsoft Corporation (NASDAQ MSFT) is suing Samsung for failure to fully pay all patent licensing fees relating to the Korean tech giant’s line of Android smartphones. Samsung only issued a very brief statement: “We will review the complaint in detail and determine appropriate measures in response.”

Microsoft Corporation (NASDAQ MSFT) and Samsung have a long-standing partnership relating to the Korean firm’s license to sell of Windows PCs and Windows Phone handsets. The current lawsuit over Android patent fees is the first time that Microsoft has launched a legal action against Samsung. The Microsoft blog on the topic walks a fine line between accusing Samsung of using the Nokia deal “as an excuse to breach its contract” and reassuring Samsung and investors regarding their partnership.

David Howard, deputy general counsel for Microsoft, explained the firm’s position in the blog. “Microsoft values and respects our partnership with Samsung and expects it to continue. We are simply asking the court to settle our disagreement, and we are confident the contract will be enforced.”

Microsoft Corporation (NASDAQ MSFT): Patent Fight

Microsoft owns hundreds of patents relating to Google’s Android OS, and rakes in somewhere between one and two billion dollars a year in licensing revenue from those patents. Over the last few years, this form has gone after a number of Android device-makers to get related Android patent fees, and has so far made deals with 25 companies, including Samsung, HTC, Acer, ZTE and Nikon.

Samsung made a licensing deal with Microsoft Corporation (NASDAQ MSFT) back in September 2011 and made its first payment in 2012. A redacted copy of court papers filed by Microsoft’s lawyer posted online by news site Geekwire shows that Samsung did not make a second payment in September of 2013 after hearing about of the Nokia deal.

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Microsoft Corporation (NASDAQ MSFT) Business News

Samsung apparently paid the annual licensing fees in November, but Microsoft claims it is still owed interest on the money over the two months it was not paid. The complaint also alleges that Samsung has asked the Korean business regulatory authorities to intervene to eliminate future licensing fees — something that Microsoft says is clearly outside the regulators’ authority.

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